Chasing Income and Growth? Here Are the TSX Stocks I’d Buy

Stocks are often categorised as income or growth, depending on the way they provide returns to shareholders. Each stock type has specific traits:

• Income stocks have a regular source of cash flow, which they distribute as dividends.
• Growth stocks are riskier as they seek revenue growth, which may not be in their control.
• Hybrid stocks give dividend growth and/or capital appreciation with regular dividends.

Depending on your financial goals, you can choose a TSX stock.

TSX stocks if you are chasing income

When we speak of income stocks, mortgage lenders, real estate companies, utility and energy companies are the preferred choice.

Slate Grocery REIT (TSX: SGR.UN) is a perfect stock with its annual dividend yield of 7.4%. It has 115 properties in 23 US states, 46% of which are rented to grocers. It earns over 18% rent from Kroger and Walmart and is looking to monetize the real estate needs of omnichannel distribution. E-commerce is not replacing retail but building a new segment by meeting real estate market needs – warehouse and pickup stores.

Slate Grocery’s 93.6% occupancy rate gives ample room to grow rental income. Moreover, a 4.4-year weighted-average lease term gives assurance of regular rental income with scope for renewals at higher rent. A $10,000 investment in Slate Grocery REIT can start earning you $732 in annual passive income.

TSX stocks if you are chasing growth

Celestica (TSX: CLS) is a good stock to buy if you want to chase growth. It became a poster stock in the artificial intelligence (AI) infrastructure growth spree, surging 1,980% between July 2023 and May 2026, triggered by Ethernet Switches for cloud and AI data centres. AI stocks saw a sharp correction in June as companies grew cautious about their AI tokenization costs. This saw Celestica stock correct 22%.

But there is growth beyond Ethernet switches for Celestica. The next revenue growth is coming from the high-margin Enterprise segment catering to AI compute and hyperscalers. It seems like revenue from manufacturing Google’s tensor processing unit is finally flowing in. Celestica even revised its 2026 guidance, and this time the earnings are growing faster than revenue.

This growth justifies the 28 times forward price-to-earnings ratio. Celestica is looking to raise US$3 billion in equity financing for working capital and capacity building to meet long-term demand from hyperscalers. This dilution could pull the stock down, but it has the potential to double your money in the next five years.

Hybrid TSX stocks

Dividend growth

If you seek a lower-risk growth stock with assured payouts, you could consider Canadian Natural Resources (TSX: CNQ). Although the energy stock has a lower yield of 3.8%, it has a 26-year dividend growth history, growing dividends between 2% and 50%. The company incorporates dividends into its breakeven price and deducts them from funds from operations before allocating cash for capital expenditures. This ensures your dividend is safe.

Canadian Natural Resources grows its funds from operations by reducing debt, increasing the mix of high-margin Synthetic crude and light crude when WTI prices are down. CNQ stock grew its dividend by 6.4% in 2026 as its debt level surged to $16 billion, above its $13 billion target. However, it has accelerated debt repayment and reduced it to $14.5 billion by June 2026. Once it reduces the debt to the target range, it will allocate all free cash flow towards share buybacks.

A lower share count will help CNQ increase dividend growth in the long term even if oil prices fall.

Growth with dividends

If you want to generate wealth but need regular payouts to stay invested, Royal Bank of Canada is the ideal stock. RB stock offers 20% average annual capital appreciation in its share price as its mortgage portfolio and value of assets under management increase. It provides regular quarterly dividends, growing them in 23 of the last 26 years.